There are such massive fundamentals at play with Bitcoin (growth in users, difficulty adjustments, exchange problems, concerns or misunderstandings about security and scalability, etc), that it's not clear to me whether technical analysis can yield useful results.

My thinking on this is: generation is a different currency pair. It's ELECTRICITY/BTC instead of USD/BTC.

That's an interesting way to look at it, but that "currency analogy" will surely fall apart in the future when electricity/btc becomes enormous (as bundle sizes halve every 4 years) and eventually infinite (when the size of generated bundles reaches zero).

If the analogy didn't fall apart, all of us would become wealthier than Bill Gates, and our great-great-grandchildren would become infinitely wealthy around 2140 :-)

That's an interesting way to look at it, but that "currency analogy" will surely fall apart in the future when electricity/btc becomes enormous (as bundle sizes halve every 4 years) and eventually infinite (when the size of generated bundles reaches zero).

If the analogy didn't fall apart, all of us would become wealthier than Bill Gates, and our great-great-grandchildren would become infinitely wealthy around 2140 :-)

I don't see how it falls apart. You buy a certain amount of bitcoins with electricity (don't forget about transaction fees). The amount you're willing to pay depends on how much you desire BTC and how cheaply you can get electricity (and how efficiently you can use it).

I don't see how it falls apart ... don't forget about transaction fees

Sorry I did forget about transaction fees. I accept your way of looking at it.

When you have three currencies with independent exchange rates, those rates are kept consistent by arbitrage. So as the bitcoin economy grows we can expect that there will be times when people are using arbitrage to correct the market prices. For example, instead of buying BTC with electricity, there will be times when it is more worthwhile to sell electricity for USD and buy BTC with those USD.

Actually, I disagree here. Something fundamental has changed, the Federal Reserve has openly admitted to intentionally manipulating equities prices, as well as an intention to continue to do so while also directly supporting US Treasury Bond sales with $600 Billion in newly created US currency. I think that this open intent to spur inflation has a lot to do with this Bitcoin rally, regardless of what national currency we are pricing it in. Capital flows freely, after all.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Here is a special Interim Technical Bitcoin Forecast Update, given the acceleration of the rally (which develops as expected in previous updates: "surprises are likely to occur to the upside, and buying “panics” are always possible. Strong targets are 0.25 $, 0.50 $ and parity."

I wanted to share with you a longterm picture, now that (thanks to some heroes here: tcatm), we have a fantastic charting tool.

I have charted BTC in all USD over the past year. I used log scale, which, given the extend of the rally, is better than using normal charts.

Key question was to define a price target.

I constructed a parallel trend channel, which is derived from a very nice and almost ideal uptrend line connecting the lows. When looking at the upper trendline, price targets of 1.0 to 1.5 $ over the days/weeks are possible. Of course, this is not likely to happen in a straight line, but the parity target will be a magnet for prices.

Again, a correction / consolidation can happen as well, but as long as prices do not break 0.15-0.17, the upper targets are not unrealistic.

Price of BTC in USD up by a factor of approx. 15 to 25 in a few weeks. Yet the number of traders where you can spend Bitcoin on the internet has barely changed. This is beginning to look like a bubble.

Bubble talks also appeared in the late 1990s and the stock market rally still had huge legs.From a sentiment point of view on bitcoin forecasts, the rally will only end if most people, including people here on the forum believe the rally won't end.

Price of BTC in USD up by a factor of approx. 15 to 25 in a few weeks. Yet the number of traders where you can spend Bitcoin on the internet has barely changed. This is beginning to look like a bubble.

For sure the current price rises are not due to any increase in trading bitcoins for everyday goods.

But that kind of trading can't become widespread until bitcoins are valued higher.

If you need to spend all of your bitcoins to buy a can of baked beans, you're not going to do it. But when the time comes that you can buy a can of baked beans for 0.01% of your bitcoins, you'll be happy to do it and trading will take off.

The current price rises are due to BTC purchases by people who can see the future potential and are betting on it.

Price of BTC in USD up by a factor of approx. 15 to 25 in a few weeks. Yet the number of traders where you can spend Bitcoin on the internet has barely changed. This is beginning to look like a bubble.

Weird math. Price is 50 cents absolute max. You know a place where you could buy coins for 2-3 cents last month?

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.

Price of BTC in USD up by a factor of approx. 15 to 25 in a few weeks. Yet the number of traders where you can spend Bitcoin on the internet has barely changed. This is beginning to look like a bubble.

I cannot disagree; however... any "serious" investor is going to have many thousands of USD$ at their disposal, if not millions. Bitcoin's entire market cap is only $1.2 million. Thus, the arrival of even a single "serious investor" seems likely to spark a huge price rally.